Back to the High Street

IKEA Bringing Stores Closer to the Customer

11 Oct 2016, Johanna Bjarsch Follin

Flat packages, collect it yourself, assemble it yourself, and of course – the beloved meatballs. This is IKEA as we, and most people around the globe, know it. But new times require new strategies, and as customers get used to the comfort of ordering online and having it delivered to their door, IKEA is extending the Swedish concept with a new retail format to make shopping easier, more convenient, and more accessible.

Simply put, it’s IKEA, but not as you know it.

The new format is called Order and Collection Point, which is part of a global test to fulfill IKEA’s philosophy of being for the many people. Jack Jackson, New Format Development Manager for IKEA UK and Ireland, is one of the people behind the new format. He explains what impact this new format has on IKEA and its customers.

“The idea of extending the IKEA concept with this new format is to bring IKEA’s home furnishing range and expertise closer to customers, even those who find themselves distant from a full-size IKEA store”, Jackson tells The LINK.

“IKEA has 19 stores across the UK, which is a quite small number compared to the size of the market, and we also have a substantial and successful e-commerce business here in the UK. In order to be more accessible more quickly, and provide services to customers who are looking for more complex purchases, we want to find a road between online and in-store experience”, Jackson explains.

The Order and Collection Points are smaller than the existing stores, and consequently cannot hold the full range assortment of furniture and products. The aim of the Order and Collection Points is instead to provide accessibility and service to customers; accessibility in terms of opening in city centres or in locations far from existing IKEA stores, and service in terms of providing expert advice and personal service that customers cannot get online.

The Order and Collection Point in Birmingham

In the past year, five Order and Collection Points have opened in this market; four in the UK and one in Dublin. Apart from Norwich and Aberdeen, the Order and Collection Points have opened in areas which are considered to be IKEA’s primary markets and where they already have existing stores; Dublin, Birmingham and London. London’s Order and Collection Point opened in August, so as to overcome the accessibility issue of Londoners without access to a car needed to transport larger items.

“The existing stores are not necessarily conveniently located for using public transport, and if you plan to buy something big and complex you need to talk to experts several times before making the purchase. We want to bring customer support and our expertise and experience closer to people so they feel more confident with their purchases” Jackson tells The LINK.

Traditionally, IKEA has been characterised by large warehouse stores in the outskirts of cities. The blue and yellow buildings served as destinations for whole-day shopping adventures, including strolling around in every showroom for inspiration, meatballs for lunch, cinnamon buns for dessert, collecting the many brown cardboard packages, and oftentimes a car ride to and from the store. Fear not, the stores will not go away, but for those who are tired of travelling far for shopping and meatballs, yet want a non-virtual shopping experience, the Order and Collection Points serve as a complement to e-commerce and brick-and-mortar stores.

“People these days are used to shopping across channels and on multiple devices. We need to listen to what the customers want, and in order to fulfil our vision of being for the many people and offer our services in a more accessible way, we want to try different ranges of products and tweak the format to find the optimal solution. We believe that these tests and results will be beneficial not only for IKEA and the UK, but for omni-channel business in general,” Jackson says.

Almost a year ago, in November 2015, the first Order and Collection Point opened in the UK, in Norwich. Are there any clear trends or already experienced benefits from extending IKEA’s services, one may wonder?

“We use all the different Order and Collection Points to evaluate which products we should aim to have as the limited in-store pick-up line, and for this we receive great feedback both directly from customers and also from the new stores” says Jackson, and adds: “But what is perhaps even more interesting is that we have seen an increased online activity and e-commerce in terms of sales since we launched the new format.”

The conclusion to draw from this is that by offering multiple contact points; physical full-range stores, online presence and now the Order and Collection Points, IKEA provides the customers with more opportunities to connect with IKEA for inspiration, assistance and actual purchase. It is up to the consumer how that specific individual wants to behave, and different customers follow different paths to purchase and have different contact points before closing the deal.

“The Order and Collection Points bridge the gap between online and in-store shopping. The concept enables us to provide planning and design advice by our experts in an accessible way; expert knowledge which is pretty much impossible to get simply from browsing online, yet accessible as the Order and Collection Points are centrally located,” Jackson says.

Customers have certain expectations when visiting IKEA. They expect to be inspired by smart furnishing solutions, they expect there to be meatballs, and they expect to be assisted in solving the problems they have at home. These elements must still be present in the new concept stores, or customers will lose the connection to IKEA. In addition, all markets has its own need, and opening a new store hence require research on how people in the area live and their specific needs. All Order and Collection Points differ slightly depending on location, as the geographical differences are reflected in the demographics of the visitors of each respective store.

“The Order and Collection Points all offer expertise for more complex purchases such as kitchens and wardrobes, but in the Birmingham store we have also focused on having low cost and functional furniture in store, as we expect many student visitors from nearby universities, whose purchase decisions are mainly based on price,“ Jackson says.

On the aspect of adapting the new format stores to their respective market, Jackson adds: “Another interesting element of the Birmingham store is that we serve the traditional Swedish meatballs with curry sauce instead of the traditional Swedish gravy, as Birmingham has a diverse population, some of which favouring curry sauce”. *

The retail industry has experienced a major shift in the past years. The emergence of e-commerce is not more than ten years old, yet today we almost take it for granted. How does IKEA look upon the shift in the retail industry, does the convenience of e-commerce outshine the personal service one can only get in a physical store? Jackson doesn’t think so.

“This new format does not mean we will see a replacement for the store. The store expansion is accelerating, and people ultimately go to the full-size store to get the full IKEA experience,” he says.

Instead the new concept is, according to Jackson, a logical progression of a rapidly growing e-commerce business.

“More channels means more opportunities to interact with customers, and the customers want to visit the store for inspiration and to get personal service. You can’t buy a kitchen online, you will want to interact with experts. So the shift in retail business has brought a need of building more stores more quickly,” he says, and continues:

"Building a full-size store takes time, and this is why we want to offer our customers a complement to online and in-store shopping. You get the inspiration and the personal contact at the Order and Collection Point, but with a whole new accessibility and speed to market than the traditional IKEA stores."

Next on the agenda is a trial period to test not only the format, but also to find the ideal number of products as well as a good range for the limited pick-up line for people to take home on the day. Jackson explains:

“We will assess, tweak the offer and evaluate the potential upsides of the new service extension we provide with the Order and Collection Points. We will of course make a few mistakes, but we will learn from them for the benefit that we will then know what to do in the future. Our customers want well designed products and low prices, and the ultimate goal with the new format is to fulfil IKEA’s philosophy of bringing this, and also meatballs, to the many people.”

* The SCC tried meatballs with curry sauce during a visit in Birmingham, planning 2016’s edition of Urbanisation Forum, and even though they area bit hesitant to admit it, meatballs with curry sauce are surprisingly tasty.